S.J. foreclosures shrinking

Foreclosure notices dropped sharply in the last three months of 2012 in San Joaquin County, paralleling a pattern seen across California.

The Record

Foreclosure notices dropped sharply in the last three months of 2012 in San Joaquin County, paralleling a pattern seen across California.

San Diego-based DataQuick reported Wednesday that 1,098 notices of default - the first step in foreclosure - were filed in the county during the fourth quarter, down more than 37 percent from the same period in 2011.

Further, actual foreclosures dropped by 30 percent to 703 in the same period compared to a year earlier.

Last week, Irvine-based RealtyTrac, which also follows foreclosures, said that despite a 25 percent decrease in foreclosure activity from 2011, San Joaquin County posted the nation's highest foreclosure rate in 2012 among metropolitan statistical areas with a population of 200,000 or more: 3.98 percent of housing units (one in 25) were hit with a foreclosure filing during the year.

Statewide, the number of home-owners pushed into foreclosure late last year fell to the lowest level in six years, the result, according to DataQuick, of rising home values, an improving economy and a shift toward short sales.

"Home values increased through most of 2012, and the rate of increase picked up toward the end of the year," DataQuick President John Walsh said,

"That means fewer and fewer home-owners are underwater, where they owe more than their homes are worth. That in turn means they can sell and pay off the mortgage or perhaps refinance at today's low interest rates.

"This trend alone suggests we'll see a continued decline in foreclosure rates this year. Another factor is the foreclosure-avoidance goals of various settlements between lenders and the government."

Home prices have come up in San Joaquin County. The California Association of Realtors reported last week that the median price for an existing home sold in December was $184,320, up 15.7 percent from a year earlier.

Foreclosure resales accounted for 16.6 percent of all California resale activity last quarter, down from 20 percent the prior quarter and 33.6 percent a year ago. It peaked at 57.8 percent in the first quarter of 2009.

Foreclosure resales - properties foreclosed on in the prior 12 months - varied significantly by county last quarter, from 5 percent in San Francisco County to 31.4 percent in Sutter County.

Short sales - transactions where the sale price fell short of what was owed on the property - made up an estimated 26 percent of statewide resale activity last quarter. That was down from an estimated 26.4 percent the previous quarter and up from 25.7 percent of all resales a year earlier.

The estimated number (rather than percentage) of short sales last quarter rose 4.2 percent from a year earlier.

While 1.1 million of California's 8.7 million houses and condos have been involved in foreclosure proceedings the past five years, 780,000, less than 10 percent - were actually lost to foreclosure. The other 320,000 were either sold or the payments brought current.